The Brewery Buy-out Thread

The consolidation of the beer industry continues…

New Belgium Sells out to Lion (Kirin)

If anyone didn’t see it last week, Craft Brew Alliance is being fully purchased by ABInBev.

An insider with much better information than I have says that the next couple of years are going to ugly.

don’t the employees/owners have to approve of the sale for the deal to close?

Yes, but I would be very surprised if they don’t approve it. New Belgium went from selling 955,000 barrels in 2017 to selling 849,000 barrels in 2018. The market share for large regionals has not been doing well for the last couple of years, and is unlikely to change for the better in the next couple of years.

Huge news.

On that note, when do we get to redefine what a “craft brewer” is and what it isn’t? And advance apologies for getting somewhat political, but I don’t see larger “craft brewers” selling out to corporate conglomerations as a being good thing for the industry, not at all.

Interesting move and it probably means we will be seeing more New Belgium beers in Australia. We’ve been seeing some for a few years now anyway.
As a general comment, I don’ think Lion/ Little world Beverages have screwed up the local breweries they have bought too badly, and they are obviously looking at a global portfolio as they have already acquired a couple of English breweries on top of the existing Australian and New Zealand portfolio. They were probably still cashed up from selling off their wine division to Accolade a couple of years ago.

all beer factories for tired brands IMO. Would choose them over coors or bud, etc, but never seek them out

My definition of a Craft Brewery is very different than the Brewers Association definition (which keeps changing so that Sam Adams can be a member). I think anyone making over 100,000 barrels is more like ABInBev than they are like a Craft brewery, and anyone over 25,000 barrels is suspect.

That is a very sobering number. newhere

I wonder if this was the economic factor that induced all the other super regionals to sell. Goose Island, Lagunitas, etc.

Maybe there’s a ceiling for organic growth in this market and if they want to get bigger they need to get out the check book otherwise sell at the high.

[winner.gif]

It’s really hard to make exceptional beer on an industrial scale. First, you need to find and train people that are passionate about beer so that you can produce something consistently. Then you need to figure out how to keep the accountants from fucking up the beer. Then you need to find a nationwide audience. Good luck.

In the right area (high population), you can sell a lot of beer locally, but when you start sending beer across country, again, good luck.

I’m not sure I see a future for these regional craft beers and especially once they get corporatized. Most everybody who’s really into beer is drinking hyper local now. At one time these now big guys were making unique beer that just wasn’t around in every city. At this point most of the magic has been figured out and great beer can be found anywhere, so why support the conglomerates. Of course there are exceptional tiny breweries and those guys will always be sought out nationally. it’s the brewer I want to chase though, not necessarily the brand. I’d think the brewer could just take the cash and start over, start creating freely again.

This is the story of Alpine Beer Co and Greenflash to a tee.

Cheers,

Bud

The death of Alpine still stings, although I will never begrudge anyone monetizing their work, efforts. On the positive side, the more folks that cash out, the more opportunity for new folks to do something great. The one that comes to mind for me is Revision, I think that was born out Knee Deep. Anyhow, for those of us fortunate enough to be in great beer areas, there is always something new & exciting.

Not to mention beer as a category is struggling with wine, spirits, and hard seltzer all stealing share and the only beer companies with the revenue to advertise are Bud, Miller, Coors and Sam Adams… hardly the group to attract new consumers.

Add in franchise laws in most States so you’re stuck in your distributor decision unless someone is crazy enough to pay the franchise fee, for a likely declining brand, that distributors make very little profit on but takes immense effort and labor to warehouse, distribute and maintain in regards to draft.

Smaller local, single State breweries can be successful, once they go bigger, its diminishing returns as the investment in other States is massive vs. word of mouth groundswell in home State.

Rick, any comments on the New Glarus in-state only business model? It’s pretty impressive how much beer they’re able to turn over without shipping out of state while also being located in a fairly rural location.

I tend to gauge how well a brewery can do without outside distribution by the population within 200 miles of the brewery. The bigger the population, the bigger the brewery. It sounds like New Glarus has done a great job of defining their market and owning it. Many of the larger breweries have seen their sales drop in the last couple years and I don’t have access to that information here at home to see how New Glarus is doing. I would think that it would be easier to defend your barrelage in a single state. I also notice that there are half as many breweries in WI per capita as there are in Oregon. Maybe the laws aren’t as welcoming or maybe no one wants to take on the 50 ton gorilla.

We have nothing like that in the Pacific NW. Instead, we have a whole host of breweries, many owned by the big guys (Widmer/Redhook (ABI), Deschutes, Ninkasi, 10 Barrel (ABI), and Hop Valley (Miller)), with really good sales in state but no one with real ownership. In the case of Deschutes, 20 years ago they could have owned the state except that Widmer was already here with more tap handles than anyone else in the state including Budweiser, and they had already sold out. Right now breweries are dropping like flies here, and we expect that to continue for the next year to 18 months. There are too many breweries where the owners have more money than sense.

BTW, is their beer any good?

Rick, really appreciate the perspective on the Pacific NW and I’d say Chicago/IL is a better parallel than WI in terms of larger breweries owned by the bigger guys (given Goose Island, Lagunitas, etc.). We really don’t have too much of that in WI…maybe Minhas comes closest but even then, both their history and modern business model are fairly idiosyncratic vs. other large independents.

Interesting to hear that the brewery bubble has started collapsing in OR, was a topic at CBC 3-4 years ago IIRC and it’s hard not to notice the insane proliferation of breweries. We’ve had far more breweries open than close and I’m pretty sure part of that is simply due to Wisconsin’s seemingly insatiable appetite for beer.

New Glarus makes a great product, especially considering their volume. I’m particularly fond of their Staghorn Octoberfest, Spotted Cow Grand Cru brewery-only release and their fruit beers are out of this world, which is a style they’ve been renowned for since inception. Full disclosure, they’re one of our customers, albeit on a very limited basis in comparison to the many other breweries we work far more closely with.

What do you make of this? Constellation dumping it? Macro craft beer is dead?

The San Diego Union-Tribune: Ballast Point sold for the second time in four years.

I’m more interested in how “Kings & Convicts, a two-year-old microbrewery that employs nine people and annually produces about 600 barrels of beer” buys a formerly billion dollar concern!

make your money elsewhere… start a brewery as a second or third career

And, play golf with the guys who paid a billion dollars for a brewery and talk about buying said brewery